We frequently see RIAs make mistakes on their Forms ADV, oftentimes because they simply misunderstood a question. With the SEC’s recent changes to Reg BI, and the new Form ADV Part 3 requirement, RIAs may be in need of a compliance refresher.
In this week’s Ask An AdvisorLaw Expert, we’re taking a deep dive into all parts of Form ADV with our very own Michelle Atlas-Quinn, J.D.
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There are a number of steps to filing your Form ADV. Part I talks about the business ownership, the types of clients you’re going to service, and the products you intend to use to service those clients. Parts 2 A and 2 B: Part 2 A is a narrative that discusses your firm, and Part 2 B is a narrative for each individual investment advisor representative of your firm. And then, more recently, Form Reg BI was passed, and ADV Part 3 is now required to talk about conflicts and how your firm is paid. Each of these forms needs to be updated within 30 days of any material change and also within 90 days of the end of your fiscal year. There are a number of challenges with keeping these updated and making sure that you’re answering the questions clearly and correctly. Oftentimes, we see mistakes where they just misunderstood the question. So it’s important to have a professional identify the appropriate answer for your firm.